As of Oct. 2, the following stocks seem to be undervalued by the market, as their price-earnings ratios are below 20 and their price-earnings to growth (PEG) ratios stand below 1. Furthermore, these stocks have received positive recommendation ratings from sell-side analysts on Wall Street.
AbbVie Inc
The first company that meets the criteria is AbbVie Inc (ABBV, Financial), a North Chicago, Illinois-based drug major.
Shares closed at a price of $86.12 each on Friday for a market capitalization of $151.99 billion.
The price-earnings ratio of 18.32 is more compelling than the industry median of 24.4, while the PEG ratio of 0.86 is below the industry median of 2.29.
The stock price rose by 16% over the past year and has a 52-week range of $62.55 to $101.28.
GuruFocus assigned a low rating of 3 out of 10 for the company's financial strength and a remarkably high rating of 9 out of 10 for its profitability.
As of September, Wall Street sell-side analysts recommend an overweight rating for this stock and have set an average target price of $109.29 per share.
Builders FirstSource Inc
The second company that qualifies is Builders FirstSource Inc (BLDR, Financial), a Dallas-based manufacturer and supplier of building materials and services to U.S. homebuilders and consumers.
Shares closed at a price of $33.69 each on Friday for a market capitalization of $3.93 billion.
The stock has a price-earnings ratio of 19.12, which is less appealing than the industry median of 13.5 but still below 20. The PEG ratio of 0.42 is more compelling than the industry median of 1.29.
The share price has risen 66% over the past year for a 52-week range of $9 to $33.80.
GuruFocus assigned a positive rating of 5 out of 10 to the company's financial strength and another positive rating of 6 out of 10 to its profitability.
As of September, Wall Street sell-side analysts recommend a buy rating for this stock and have established an average target price of $34.90 per share.
Companhia De Saneamento Basico Do Estado De Sao Pa
The third company that makes the cut is Companhia De Saneamento Basico Do Estado De Sao Pa (SBS, Financial), a Brazilian provider of treated water, sanitation and liquid waste services.
Shares closed at a price of $8.05 each on Friday for a market capitalization of $5.50 billion.
The stock has a price-earnings ratio of 15.63, which appeals more than the industry median of 16.45, while the PEG ratio of 0.66 is also more convenient than the industry median of 2.51.
The price has fallen 31.8% over the past year, determining a 52-week range of $5.54 to $15.40.
GuruFocus assigned a positive rating of 5 out of 10 to the company's financial strength and a high rating of 8 out of 10 to its profitability.
As of September, Wall Street sell-side analysts recommend an overweight rating for this stock and have produced an average target price of $11.77 per share.
Disclosure: I have no positions in any security mentioned.
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